GST IMPLEMENTATION VS. TRADITIONAL INDIRECT TAX SYSTEMS: A COMPARATIVE EVALUATION OF ADMINISTRATIVE CHALLENGES

GST has made significant progress in Indian taxation system. Globally, the Goods and Services Tax (GST) indirect tax system is gaining traction, with more than 160 countries having implemented it as of April 1, 2015. Malaysia is the newest country to have done so. The GST was conceived in 2004 by the task force on the fiscal Responsibility and Budget Management Act of 2003 (Kelker Committee) to replace the federal and state indirect tax systems. According to the Kelker Committee, a nationwide GST reform that taxes almost all goods and services consumed in the economy would be capable of establishing a common market, broadening the tax base, increasing the revenue productivity of domestic indirect taxes, and improving welfare through efficient resource allocation. The GST is intended to be a dual system (as is the case in Canada), with the Union and State governments levying and collecting taxes separately. The proposed GST is a consumption-based tax, which means that only final consumption of products is evaluated. GST is a unified tax on goods and services that allows for set-offs across the supply chain. This paper examined the proposed GST framework and current taxation system, first identifying the proposed GST and current taxation structure, then comparing the proposed GST framework and current taxation system, and concluding with a brief discussion of the proposed GST framework and current taxation system's impact on employment and various sectors. However, the researcher made notice of previous investigations. The Indian government has designated April 1, 2016 as the date for GST rollout.